Tag: higher

Market focus is largely attuned to a spectacular drop in crude futures, with international benchmark Brent crude and U.S. West Texas Intermediate (WTI) falling sharply overnight. The declines have added to mounting pressure on the U.S. central bank to consider abandoning its commitment to yet more interest rate hikes. Complicating matters for the central bank, President Donald Trump warned Tuesday that it must tread carefully in order not to “make yet another mistake,” while a Wall Street Journa

Market focus is largely attuned to a spectacular drop in crude futures, with international benchmark Brent crude and U.S. West Texas Intermediate (WTI) falling sharply overnight.

The declines have added to mounting pressure on the U.S. central bank to consider abandoning its commitment to yet more interest rate hikes.

Complicating matters for the central bank, President Donald Trump warned Tuesday that it must tread carefully in order not to “make yet another mistake,” while a Wall Street Journal editorial called for a pause.

Nonetheless, market participants still widely expect the Fed to announce a quarter-point rate hike on Wednesday.

Back in Europe, investors are likely to closely monitor U.K. inflation rate figures for November at around 9:30 a.m. London time. The euro area is scheduled to publish construction output data for October later in the session.

Despite falling oil prices, Saudi Arabia will continue paying its citizens cost-of-living allowances, the country’s King Salman announced during the unveiling of its 2019 budget on Tuesday. The budget will boost spending even as Saudi Arabia endeavors to close its budget deficit, indicating Riyadh’s priority to spur growth in an economy hurt by lower oil prices. State spending will increase by more than 7 percent next year to 1.106 trillion riyals ($295 billion) from 1.030 trillion riyals, in li

Despite falling oil prices, Saudi Arabia will continue paying its citizens cost-of-living allowances, the country’s King Salman announced during the unveiling of its 2019 budget on Tuesday.

The budget will boost spending even as Saudi Arabia endeavors to close its budget deficit, indicating Riyadh’s priority to spur growth in an economy hurt by lower oil prices. State spending will increase by more than 7 percent next year to 1.106 trillion riyals ($295 billion) from 1.030 trillion riyals, in line with a September pre-budget statement, according to the country’s finance ministry.

Analysts believe the continued cost-of-living allowances, first established in January 2018 and estimated by officials to cost more than $13 billion, are intended to stimulate sluggish growth and shore up support for the royal family and Crown Prince Mohammed bin Salman after a controversy-ridden few months.

The royal allowances of 1,000 riyals a month ($266) are paid to civil servants and military personnel, and other allowances will continue for pensioners and those living on social security. Riyadh will also increase student benefits by 10 percent for the next fiscal year, the king announced.

The International Monetary Fund previously forecast the country’s budget deficit to shrink to less than 2 percent of gross domestic product (GDP) next year in the event that the allowances were scrapped. The budget deficit for 2019 will now be 4.2 percent of GDP, according to the government’s statement Tuesday.

Stocks in Asia were mostly higher on Monday following a report suggesting further turmoil for the markets in 2019. The mainland Chinese markets were mixed by the end of their trading day after the country reported lower than expected economic datalast Friday. The Shanghai composite rose 0.16 percent to close at around 2,597.97 while the Shenzhen composite declined by 0.309 percent to end the trading day at about 1,323.31. One investor told CNBC’s “Squawk Box” on Monday that the bargain hunting f

Stocks in Asia were mostly higher on Monday following a report suggesting further turmoil for the markets in 2019.

Investors were setting their sights on key policy meetings in the coming week — ahead of the U.S. Federal Reserve’s upcoming interest rate meeting and as China on Tuesday marks the 40th anniversary of the country’s reforms under former leader Deng Xiaoping.

President Xi Jinping is expected to deliver a major speech on Monday. It comes as Beijing’s trade war with Washington spurs government advisors and think tanks to urge for urgent reforms in Asia’s largest economy.

The mainland Chinese markets were mixed by the end of their trading day after the country reported lower than expected economic datalast Friday. The Shanghai composite rose 0.16 percent to close at around 2,597.97 while the Shenzhen composite declined by 0.309 percent to end the trading day at about 1,323.31.

One investor told CNBC’s “Squawk Box” on Monday that the bargain hunting for Chinese shares has already started.

“Over the next few months, if there were to be any more weakness in the Chinese market, we think that there will be more investors coming in to buy,” said Khiem Do, head of Greater China investments at Barings. “The Chinese markets are actually quite cheap.”

Meanwhile, Hong Kong’s Hang Seng index was slightly higher in its final hour of trade.

In Japan, the Nikkei 225 rose 0.62 percent to close at 21,506.88 while the Topix index saw gains of 0.13 percent to finish the trading day at 1,594.20. Shares of conglomerate Softbank recovered from earlier losses during the session to gain 0.52 percent ahead of the anticipated public listing of its mobile unit on Dec. 19.

South Korea’s Kospi closed fractionally higher at 2,071.09.

Australia’s ASX 200 saw gains of 1 percent to close at 5,658.3, with almost all sectors in positive territory.

“The ‘Santa Rally’ which had been hoped for has proven to be frustratingly elusive; and now markets are quite happy, if not desperate, for at least a dovish line to be thrown by the FOMC (and other global central banks),” said Mizuho Bank in a note on Monday, in reference to the U.S. central bank’s upcoming Federal Open Market Committee meeting on Dec. 18 and 19.

At a much-anticipated meeting on Thursday, the ECB is poised to bring an end to its crisis-era bond-buying program after nearly four years. European lenders have generally been critical of the central bank’s QE program, arguing it has a negative impact on their net interest income. Deutsche Bank, Unicredit and Intesa Sanpaolo were all trading more than 3 percent higher on the prospect of the ECB ending its contentious stimulus program. It comes after Exane BNP Paribas raised its stock recommenda

Europe’s banking index was the top performer in early morning deals, up more than 1.4 percent with market participants widely expecting the European Central Bank (ECB) to announce the end of quantitative easing (QE) later in the session.

At a much-anticipated meeting on Thursday, the ECB is poised to bring an end to its crisis-era bond-buying program after nearly four years. European lenders have generally been critical of the central bank’s QE program, arguing it has a negative impact on their net interest income. Deutsche Bank, Unicredit and Intesa Sanpaolo were all trading more than 3 percent higher on the prospect of the ECB ending its contentious stimulus program.

Looking at individual stocks, Britain’s Antofagasta surged toward the top of the European benchmark shortly after opening bell. It comes after Exane BNP Paribas raised its stock recommendation to “outperform” Thursday morning, prompting shares of the London-listed stock to rise 3 percent.

Meanwhile, Germany’s Metro slumped to the bottom of the index after the company reported persistently challenging business conditions in Russia. Shares of the wholesale tumbled more than 8 percent on the news.

Asian stocks closed higher on Thursday, with shares in Greater China leading gains after the positive momentum seen on Wall Street overnight. Greater China markets initially opened mixed, but staged a comeback to lead the rest of Asia. The Shanghai composite ended the trading session at 1.23 percent higher at 2,634.0491 points, while the Shenzhen composite closed 1.106 percent higher at 1,360.9222 points. In Japan, the Nikkei 225 rose 0.99 percent to close at 21,816.19 points and the Topix index

Asian stocks closed higher on Thursday, with shares in Greater China leading gains after the positive momentum seen on Wall Street overnight.

“Calm has finally returned to markets,” analysts at Mizuho Bank wrote in a note. Trading in markets globally was volatile at the start of the week, but stabilized after news reports in recent days indicated an easing in tensions between the U.S. and China.

Greater China markets initially opened mixed, but staged a comeback to lead the rest of Asia. The Shanghai composite ended the trading session at 1.23 percent higher at 2,634.0491 points, while the Shenzhen composite closed 1.106 percent higher at 1,360.9222 points. Hong Kong’s Hang Seng Index gained 1.18 percent to end at 26,495.67 points.

In Japan, the Nikkei 225 rose 0.99 percent to close at 21,816.19 points and the Topix index ended 0.62 percent higher at 1,616.65 points. Over in South Korea, the Kospi inched up 0.62 percent to 2,095.55 points at the close.

There were big moves in the Australia market. Shares of Hutchison Telecommunications plunged 21.43 percent at the close, while TPG Telecom fell by 16.67 percent. The two companies announced plans to merge in August this year, but the Australian Competition and Consumer Commission on Thursday released a statement expressing concerns about the proposal.

ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.8611 percent, while the yield on the 30-year Treasury bond was also higher at 3.1450 percent. Investors are increasingly concerned about a possible economic slowdown, shortly after the U.S., China and Japan all reported weaker-than-expected economic data. Meanwhile, the U.S. Treasury is set to auction $39 billion in 13-week bills and $36 billion in 26-week bills on Monday. In energy marke

At around 5 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.8611 percent, while the yield on the 30-year Treasury bond was also higher at 3.1450 percent.

Investors are increasingly concerned about a possible economic slowdown, shortly after the U.S., China and Japan all reported weaker-than-expected economic data. It comes after Wall Street’s main indexes closed more than 2 percent lower on Friday, registering their largest weekly percentage declines since March.

On the data front, investors are likely to closely monitor the release of October’s Job Openings and Labor Turnover Survey (JOLTS) at around 10 a.m. ET.

Meanwhile, the U.S. Treasury is set to auction $39 billion in 13-week bills and $36 billion in 26-week bills on Monday.

In energy markets, crude prices were mixed after OPEC and allied non-OPEC oil producers agreed to implement a supply cut from January. Despite the news, the price outlook for 2019 remains uncertain on the back of an economic slowdown.

International benchmark Brent crude traded at around $61.66 on Monday, up around 0.05 percent, while U.S. West Texas Intermediate (WTI) stood at around $52.40, more than 0.4 percent lower.

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion. Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce. “Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures. The dollar declined against the safe-haven yen as a spike in risk aversion pressured equitie

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion.

Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce.

“Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures.

A balance between a host of factors such as a rate hike by the U.S. Federal Reserve in December, uncertainty about trade tensions between Washington and Beijing, and a flattening yield curve has helped create a premium for the bullion, Lu added.

Fed policymakers will gather at a Dec. 18-19 meeting, at which the central bank is widely expected to raise interest rates.

“Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate hike timings in 2019,” said Lukman Otunuga, a research analyst at FXTM, adding that: “if the meeting echoes a similar message to (Chairman Jerome) Powell’s dovish shift, gold has the potential to shine into 2019.”

The dollar declined against the safe-haven yen as a spike in risk aversion pressured equities and U.S. Treasury yields. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates.

“An yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it’s going to be very positive,” Phillip Futures’ Lu said.

Spot gold may test a resistance at $1,245 per ounce, a break above which could lead to a gain into a range of $1,253-$1,258, according to Reuters technical analyst Wang Tao.

Meanwhile, palladium continued to be more valuable than gold after outshining the yellow metal for the first time since 2002 on Wednesday, with prices soaring by around 50 percent in less than four months to record levels.

Spot palladium rose 0.1 percent to $1,245.00 per ounce, hovering near its record high hit in the previous session.

The market now awaits Friday’s U.S. non-farm payrolls data for November, which is expected to show unemployment remains at 3.7 percent.

“Investors are seen adopting a cautious stance ahead of the U.S. jobs report which could offer insight over the health of the U.S. labour force,” said FXTM’s Otunuga.

Amongst other metals, silver fell 0.7 percent to $14.41 per ounce, while platinum extended losses into a third session, declining 0.7 percent to $795.00 per ounce.

Mortgage rates have now been falling for three straight weeks and that is reinvigorating the refinance business. Total mortgage application volume rose 2 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was still 36 percent lower than a year ago, when interest rates were lower. Mortgage interest rates are still 89 basis points higher than a year ago and home prices are still gaining, making home buying ever more

Mortgage rates have now been falling for three straight weeks and that is reinvigorating the refinance business. It is not, however, bringing many more buyers back to today’s very expensive housing market.

Total mortgage application volume rose 2 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was nearly 19 percent lower than the same week one year ago.

Refinance activity drove the volume, increasing 6 percent for the week. Refinances are highly rate-sensitive week to week, as borrowers seek to save money on monthly payments. Volume was still 36 percent lower than a year ago, when interest rates were lower.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 5.08 percent last week from 5.12 percent the previous week, with points decreasing to 0.44 from 0.46 (including the origination fee) for loans with a 20 percent down payment.

“Treasury rates continued to slide last week, driven mainly by concerns over slowing global economic growth and U.S. and China trade uncertainty. The 30-year fixed-rate fell for the third week in a row,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Mortgage applications to purchase a home rose just 1 percent for the week and were 0.2 percent higher than a year ago. Mortgage interest rates are still 89 basis points higher than a year ago and home prices are still gaining, making home buying ever more expensive. While the price gains are now shrinking, affordability is still at the lowest level in a decade and proving to be the biggest barrier to housing demand today; sales of both newly built and existing homes continue to suffer because of it.

Luxury homebuilder Toll Brothers saw new orders decline this fall, according to its earnings release this week. CEO Douglas Yearley blamed higher mortgage rates and high prices in California, where it sells a large share of its homes. Luxury buyers, it seems, are not exempt from today’s weaker affordability, and that is showing up in the size of loans for which borrowers are applying.

“We saw a decrease in the average loan size for purchase applications to the lowest since December 2017 ($298,000 from $313,000),” Kan said. “This is perhaps an indication that there are fewer jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close out the year.”

Mortgage rates continued to slide this week, falling to their lowest level in two months on Tuesday as the U.S. stock market sold off sharply and bond yields fell.

“Mortgage rates didn’t experience nearly as big of a move as the broader bond market,” said Matthew Graham, chief operating officer for Mortgage News Daily, noting that economic data at the end of the week, specifically the U.S. monthly employment report, could cause more dramatic moves. “If it’s weaker than expected, rates could easily continue lower, but if it surprises to the upside, the bounce back in rates could be somewhat abrupt.”

While U.S. stocks should continue to climb in 2019 amid record earnings, the trek to new highs will be marked by turbulence as both fiscal and monetary stimuli recede and economic activity slows, according to Wells Fargo. Critical to the Wells Fargo thesis for continued gains in the stock market is the belief that earnings per share can continue to grind to all-time highs in the year ahead. Forward S&P 500 EPS topped $172 by the end of the third fiscal quarter; Wells Fargo believes that number c

While U.S. stocks should continue to climb in 2019 amid record earnings, the trek to new highs will be marked by turbulence as both fiscal and monetary stimuli recede and economic activity slows, according to Wells Fargo.

Global equity strategists Audrey Kaplan and Scott Wren wrote in the Wells Fargo Investment Institute’s annual outlook that the broad S&P 500 index should climb to a range between 2,860 and 2,960 by the end of next year despite greater volatility across riskier securities. The 2019 outlook, published Wednesday, implies about 7 percent upside from current levels around 2,700.

“The end of easy means, in part, that more historically normal volatility has returned to financial markets,” the strategists told clients. “Rising interest rates make credit more expensive and the sudden shift in the geopolitical environment spark surprises.”

“However, we believe that investors should not fear the changing trend, so long as low inflation and solid earnings-per-share growth continue,” he added. “To this point, even if EPS rises more slowly late in the cycle, it can still reach higher levels that, in turn, drive higher equity prices.”

Critical to the Wells Fargo thesis for continued gains in the stock market is the belief that earnings per share can continue to grind to all-time highs in the year ahead. Corporate profits have accelerated to new heights over the past two years as President Donald Trump’s historic tax cuts eased levies on the nation’s largest companies in the hopes of spurring investment and rewarding workers.

Forward S&P 500 EPS topped $172 by the end of the third fiscal quarter; Wells Fargo believes that number could rise to $177 by December 2019.

“Household and business spending should keep profit margins at sustainable levels,” Wren and Kaplan added. “EPS for the large-cap benchmark index, the S&P 500, should have additional support from repatriated overseas profits.”

Earnings will also likely climb thanks to share buybacks, which reduce the number of outstanding shares and, in turn, boost profits per share.

The Investment Institute sees stock gains despite a slowdown in economic activity, with Wells Fargo’s economic team predicting gross domestic product to grow 2.7 percent in 2019. Darrell Cronk, the institute’s president, also warned of the end of outsized job gains as the economy enters its final stages.

Gold prices dipped on Wednesday, retreating from a more than five-week top hit in the previous session, as the dollar crawled higher. “Gold is mainly tracking the U.S. dollar,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore. “Today’s move in gold prices is a correction because yesterday prices were up quite a bit.” The benchmark 10-year Treasury yield fell to its lowest point since mid-September. $1,242.5 is the level gold has to test before it goes up to the next le

Gold prices dipped on Wednesday, retreating from a more than five-week top hit in the previous session, as the dollar crawled higher.

Spot gold was down 0.3 percent at $1,234.71 per ounce as of 0422 GMT, after hitting its highest since Oct. 26 at $1,241.86 an ounce in the previous session. U.S. gold futures were down 0.5 percent at $1,240.2 per ounce.

“Gold is mainly tracking the U.S. dollar,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

“Today’s move in gold prices is a correction because yesterday prices were up quite a bit.”

The dollar index, which measures the greenback against a basket of six major currencies, edged up about 0.1 percent, even though the U.S. currency was under pressure as declining Treasury yields raised concerns over economic growth.

The benchmark 10-year Treasury yield fell to its lowest point since mid-September. The spread between the 10-year yield over its two-year counterpart also shrank to the smallest since the start of the financial crisis in January 2008, signalling to some investors an approaching economic slowdown.

Concerns about weaker growth have stoked bets that the Federal Reserve will end its campaign to raise interest rates sooner than previously thought, analysts said.

U.S. Federal Reserve Chairman Jerome Powell said last Wednesday that U.S. interest rates were nearing neutral levels, which markets interpreted as signalling a slowdown in rate hikes.

U.S. President Donald Trump on Tuesday held out the possibility of an extension of the 90-day trade truce with China, but warned he would revert to tariffs if the two sides could not resolve their differences.

“Normally you would expect a better outing from gold given the absolute beatdown in stocks, but this is a baby step for the precious metal,” said Amit Kumar Gupta, portfolio management services head at Adroit Financial Services in New Delhi.

“Gold at this point will correct a little more. $1,242.5 is the level gold has to test before it goes up to the next level. The downside we are looking at is $1,230,” GoldSilver Central’s Lan said.

Meanwhile, palladium retreated 0.5 percent to $1,226.49 per ounce, trading in close proximity to the yellow metal and after notching its record high hit on Tuesday.

Spot silver fell 0.4 percent to $14.46 per ounce, while platinum was 1.8 percent lower at $788.90 per ounce after hitting its lowest level since Sept. 17 at $787.5 earlier in the session.